Debates of Feb. 24th, 1994

The Budget

[Jim Jordan, Liberal, Leeds—Grenville, ON]

Madam Speaker, I just want to congratulate the minister on his fine speech. I am very sorry that we did not have the opportunity to question the Leader of the Opposition. I think that is a mistake because unless we have that exchange and dialogue we are not quite sure where the opposition stands in reference to the budget.

If I understood correctly it was saying that the cuts did not go deep enough. I will never know for sure. I do know for sure that the Reform Party is saying that the cuts did not go nearly deep enough. It would have cut further and I guess would have been prepared to substantiate and defend the fallout.

I want to ask the hon. minister if he saw any further area of substantial cuts that this budget could have imposed on the Canadian people, forgetting that there is a fallout; that innocent, hardworking, perhaps unemployed Canadian people will bear the negative effect of any further cuts we would have imposed on the Canadian people. That would have to be realized.

I wonder where the Reform Party and the Bloc will be a year from today when we come in with a new budget. They will say further cuts, further cuts.

I just wonder if the minister would care to pass judgment on that. If we consider that people are still the bottom line, will there still be that position a year from today when they think we should have made deeper cuts than we did?

[John Manley, Liberal, Ottawa South, ON]

Madam Speaker, I appreciate that question as well. I must say that what I find confusing about the position that the Official Opposition, the Bloc Quebecois, has been taking, and I heard part of its leader's speech, seemed to be that it was very dissatisfied with the fact that the deficit was too high.

Yesterday in the House of Commons we heard its members raising question after question about the changes to the unemployment insurance regime which is effecting a reduction in the deficit and a reduction in payroll taxes. They send us very contradictory messages and it is impossible to understand how their ultimate political objectives which they proclaim on a regular basis of separatism are going to do anything but add to the burden of costs on the people of Canada and the people of Quebec.

With respect to the Reform Party, the comment is correct. The view has been consistently presented. I do not agree with some of the views that have been put forward by the Reform Party, particularly with respect to what it has said about eliminating all assistance to business.

For example, in the areas of concern to me, science and technology, it is the scientific research and development tax credit which gives about a $1 billion a year assistance to advanced technology companies in Canada which has made Canada a desired location for much of the R and D facilities that are here now.

In my speech I talked about how we do not have enough. If I had time I could list examples of companies that have chosen to locate facilities in Canada, high paying, high value added jobs, because of that assistance. It is provided by other countries. That

kind of work is footloose. It can be here, it can be in the U.S., it can be in Europe, or it can be in Asia.

If we are going to secure those kinds of jobs, unfortunately or fortunately, depending on how one looks at it, we have to be prepared to create a tax and economic environment which is as favourable to those efforts as is offered by our competitors.

Further, I would like to say that there are ways we can make more progress on reducing the deficit. Let me give one example. The elimination of internal trade barriers within Canada could generate as much as a 1 per cent increase in our GDP, a product of $6 billion to $7 billion a year. Why is it that so many provinces are still not willing to come to the table and say they will do it by June 30?

We have signals of goodwill. We signed an agreement last month but there is a lot of work to do. I hope that we will see all of the provinces and the federal government sign such an agreement.

We have to come to grips with areas of duplication between levels of government. That effort is being spearheaded by the Prime Minister and the Minister of Intergovernmental Affairs. That will enable us to deliver government services more efficiently and help us make more progress on the deficit in years to come.

[John Williams, Reform, St. Albert, AB]

Madam Speaker, February 22, 1994 will go down in Canadian history as the day that the Minister of Finance failed to rise to the challenge of coming to grips with the fiscal problems facing this nation.

This government has a debt in excess of $500 billion and an annual deficit of $45 billion. The Minister of Finance has brought down an uninspiring and tepid budget with nothing but a little more taxes and a little less spending that barely addresses the issue of deficit reduction and elimination. By his own admission, the actions that the minister announced in this House on Tuesday will only reduce next year's deficit by $1.5 billion, from $41.2 billion to $39.7 billion.

The Minister of Finance had led us to believe that he was launching a major attack on the debt and deficit of this country. This was to be a tough budget, he said. He was going to break the back of the deficit and we all expected that the Minister of Finance was going to be decisive. His budget reduces the size of the expected debt in this country next year by less than .3 of 1 per cent. Is that what he calls an attack on the debt and deficit? Is that being decisive?

I have challenged the Minister of Finance on several occasions. I will say it again. Will the Minister of Finance dare to be great and balance the budget by the end of this Parliament? I have stated that he could choose mediocrity or he could choose to rise above mediocrity and reach beyond himself and lead this nation out of the dark tunnel of deficits and debt and into the sunshine of renewed prosperity. History has always given the accolades to the leaders who rise to the challenge while those who have failed to rise to the challenge have been buried in the ignominy of their failure along with their mediocrity.

It would appear to me that we may find the name of the Minister of Finance and his red book, or perhaps red ink book, buried in the footnotes of history along with his indecisive and inadequate policies.

The Minister of Finance broke new ground on January 31 by holding the first ever parliamentary pre-budget debate in this House. At that time he was demonstrating his leadership. He had no shortage of innovative ideas presented to him. If he had listened to Canadians he would have heard that they were disgusted with budgets that profess to address our fiscal problems through a little more taxes and a little less spending while waiting for the panacea to fall out of the sky.

This budget, in my opinion, has failed the test of financial leadership since the deficit and the debt tunnel has just been extended again. There is no sign of that ray of sunshine of renewed prosperity. According to my calculations, the light at the end of the tunnel may have been turned off as a result of lack of leadership and lack of vision.

In his report, the Auditor General stated that hard choices lie ahead. This government continues to pay millions of dollars of old age security to high income families.

These taxes are paid by working people, many of them just scraping by. To continue paying old age security to high income families means that he, the Minister of Finance, has dodged the hard choices which still lie ahead.

What about unemployment insurance? The Minister of Finance proposes to narrow the gap between employment income and unemployment insurance payments for people with modest income and dependants, thereby further reducing the incentive to work.

If there is one thing this country needs it is more jobs. This budget has presented easy choices but no jobs. The bad news is that the hard choices still lie ahead.

A previous Liberal government, back in the seventies, promised us a just society but delivered to us a debt society. If we examine the track record of the seventies we will see that the previous Liberal government spent beyond its means and the net result was a plethora of social programs and a mountain of debt.

In the eighties the Tory governments promised to reverse this alarming trend. Every budget in the last 10 years has professed to address the annual deficits as they continue to consume our economy like a cancerous growth. What was sold to us, sold to Canadians as a just society by the Liberal governments in the seventies, turned us into a debt society in the eighties. The Minister of Finance's budget by this new Liberal government gives us every indication that, in turn, this will turn us into a bankrupt society in the nineties.

I have spoken in this House of the difficult choices and how we have surmounted them in the past. I have drawn parallels between our current situation and the period at the end of World War II when the federal debt was 108 per cent of our gross domestic product. We had back then what we would call today a peace dividend as we wound down the war effort.

That was not a time without problems, however. Soldiers were returning from the war with no jobs; industry was in transition. The leaders of our nation at that time were able to open the door to a period of unprecedented growth and prosperity through leadership and vision.

Members will note that I said leadership and vision opened the door by using the peace dividend to buy the prosperity. We did not use it to buy more social programs.

We can do the same today by creating our own deficit elimination dividend. This country needs a dramatic realignment of our resources toward the opportunities available in this rapidly changing technological world. We have talents and resources that are in high demand around the world.

If we start exploiting these opportunities and teach our citizens to build on our advantages rather than holding each other's hand through social programs, it will be then that this country will have a bright future. The sunshine of renewed prosperity will once again be realized so that we can pass that prosperity on to our children.

Unfortunately, the Minister of Finance has put that reality on hold for yet another year, if not indefinitely. The deficit elimination dividend, obtained through a dramatic reorganization of our priorities that will balance the budget by the end of this Parliament, is the only hope that I can see for the return to economic prosperity in this country.

The Minister of Finance has failed to secure the economic future of this country. He did not rise to the challenge. He did not dare to be great and he passed up on an opportunity to balance the budget in this Parliament.

The day of fiscal reckoning cannot be postponed. We must face it and we will face it. Based on the budget tabled yesterday, Canadians will have to face that day of reckoning on their own without the leadership of this government.

[Bill Graham, Liberal, Rosedale, ON]

Madam Speaker, I congratulate the hon. member on his remarks.

I would like to ask him a couple of questions that arose out of his remarks. The first is a specific one and the second is more general.

The member made specific reference to the fact that in his view old age security to high income families was still being paid as a result of the budget. Exactly what level does the member and his party set as high income? Where does the member set the line? Where would he cut the line and say that thereafter no one would get supplementary payments?

As the member knows the budget referred to a possible cap at $49,000. Where does the hon. member drop it to? Would it be $30,000 or $35,000? What is the member's definition of a high income family? The member heard the minister specifically say that the budget was trying to deal with the problem of people trying to survive in complex urban societies who need money to live. The top cap is $49,000. Where would the member draw that line?

It is easy to criticize, but we were here when the Minister of Industry explained what was in the budget for precisely, it seems to me, the types of items the member has been talking about: the need to get the economy going and the need for small businesses to have government services that would enable them to participate fully in the economy.

Is the member suggesting that all those should be cut as well? Where is the member going to cut in three years to bring us down to a flat no debt position?

[John Williams, Reform, St. Albert, AB]

Madam Speaker, in response to the member's question, during the last election we stated quite specifically that we would cut back the old age security from families making more than $54,000.

During the election campaign when I told seniors that our policy was to cut off the old age security for families making more than $54,000, their response was generally that they wished they could have earned $54,000 a year as a family. Why should hard working Canadians, many of whom are just scraping by, pay their taxes for retired people to be in Florida, Hawaii or California courtesy of the taxpayers of the country?

I will address the second question. I listened to the excellent speech of the Minister of Industry earlier this morning. I raised the point then and I will repeat it again: Why are we spending $6 billion in infrastructure programs based on sewers, roads and low tech jobs when there is such a great need to ensure that the country is competitive around the world in the area of high priced jobs where education is required, where it is important

that we can compete? I have always said that the differences between $20 an hour jobs in Canada and $1 an hour jobs in Mexico are motivation and education. That is where we should be taking the $6 billion and putting it into high tech jobs.

We cancelled a helicopter program that was to create all kinds of research and development in the country in order to pave a road from here to there. That is where this government's priorities are wrong. It does not have a philosophy and a real plan of what it is trying to do. It is trying to appease various different projects with short-term solutions.

If we finally got our act together we could accomplish what the minister was trying to say. At the same time we could balance the budget and ensure that the country has a future for our children.

[Randy White, Reform, Fraser Valley West, BC]

Madam Speaker, this is the defining moment for the new government because the first budget sets the tone for the next four years of Liberal policy. I want to talk today about a definition of my own. It defines my view of the substance of the budget. There are some good things in the budget I could spend a good deal of time talking about, but I will talk about those things that are most disappointing.

Here we are in a most critical period of our economic history and the government has gone soft. Instead of clenching its fists and getting tough with the deficit and debt at a time when world markets are watching our every move, the government has opted for a limp-wristed approach. At this defining moment for the new government the word I use to define this disappointing budget is flaccid. The dictionary defines flaccid as limp, flabby, less rigid, lacking vigour and feeble. How appropriate.

The budget is more important for what it does not address than what it does. I want to ask why the budget has not done more or, to paraphrase an American statesman, instead of looking at things the way they are and asking why, I am here today to look at the way they could be and ask why not.

My focus today is on what was not cut and why. There are no details of significant cuts to spending on things like foreign aid, wasteful aspects of bilingualism programs, ineffective multiculturalism programs, subsidies to crown corporations, and grants and subsidies to special interest lobby groups. Quite frankly the reason the government avoided these areas is that they are politically dangerous.

The time for safe, non-contentious decision making is past. It astounds me that members across the floor still refuse to acknowledge the seriousness of the country's financial situation. If we want to gain the confidence of business and the general public we have to make tough decisions now; not two years from now after more studies, but right now.

Let me illustrate some needless cuts. I will start with the b word, bilingualism. The media like to jump on anyone who mentions this issue and brand him or her anti-Quebec. It makes good ink and is guaranteed a predictable response from Quebec members. There is a difference between talking about the theory of bilingualism and the outrageous waste of money that sometimes accompanies the application of that theory.

I am talking about the needless waste of money. When it comes to official bilingualism, the act itself, we have absolutely no idea of how bad the problem of wasteful spending is. I would like to quote from a letter of a government official:

The true costs of official languages activities from the Department of National Defence are higher than those given. Unfortunately, Treasury Board reporting guidelines do not permit us to report, among other things, salaries of military personnel attending continuous language training-and the bilingualism bonus for civilian employees.

Millions of dollars were spent on translating manuals for frigates, but that figure is buried in the budget for the frigates, sunk so deep below the sea of numbers no one could ever dredge up the real true costs. While the commissioner may report the cost of official languages as about $654 million as he did in 1992, the number means nothing. A report released last year puts it somewhere between $2 billion and $4 billion. What is the truth? No one knows.

Since 1969, according to a report released last year, language policy added $49 billion to the federal debt. The effect on provincial debt and the compliance cost of private industry are left to our imagination. Where does it end?

The government has also gone weak in the knees in the area of foreign aid. Flaccid is the word. The Auditor General's report cites a litany of mismanagement, especially in the area of foreign aid. The Canadian International Development Agency, CIDA, has become a cash cow. The Auditor General reports that CIDA is trying to please too many interest groups and meet too many conflicting objectives. The result is an agency with a budget of over $1 billion a year that is characterized by confusion and ineffectiveness.

What is really confusing is the government's refusal to look to this area for major cuts. It cannot even use the excuse that it is a politically contentious area since criticism of the effectiveness of foreign aid spending is coming from all directions. What is the government waiting for? In 1993 the federal government spent just under $2.7 billion on international assistance with little or no tangible proof of any kind of results.

The horror story continues into the area of-dare I say it-the m word, the department of multiculturalism.

I am disturbed by some of the commentary in the Chamber this week. I firmly and deeply believe we are all equal regardless of race, colour or creed. Every single Canadian should be proud to stand and proclaim his heritage, but he should not expect every other Canadian to finance his group's cultural activities. These groups must be self-supporting.

In 1992-93 federal government spending on multiculturalism was nearly $120 million. What is frightening is the response I got from a researcher when I tried to get the figure. He told us he was having trouble getting a response from government departments that incur costs as a result of multiculturalism programs. In other words again we have no idea what is the true cost of multiculturalism.

A short time ago the deficit was supposed to be $33 billion. That was around the time when the election campaign started. During the election the government would not even tell us what it was. The new government took over and the number suspiciously grew. It went to $42 billion and all of a sudden we are told it could reach $46 billion. Now we are supposed to feel happy with a figure of $39.7 billion. It has to stop.

In closing I leave the House with my definition of flaccid. I will redefine the term. For the purposes of this discussion I will use the acronym, FLACCID. The previous Progressive Conservative government promised tough measures, but when it came to making the politically tough decisions it withered under the pressure. The present government was elected on the promise it would tackle this critical problem too, but its feeble attempt to come to grips with our financial woes suggests another definition of flaccid applies. The acronym stands for federal Liberals are cunning Conservatives in disguise.

[Yvan Bernier, Bloc, Gaspé, QC]

Mr. Speaker, I want to congratulate my colleague on his speech. That is not to say that I agree with everything he said. There are things I would like him to go over again. I did not understand everything he said about multiculturalism. He spoke too fast and I do not understand English all that well yet. I am trying very hard to learn but it takes a lot of time.

I would like to give the hon. member the opportunity to reiterate his thoughts on the reduction of the multiculturalism budget. I want to be sure that as long as Canada exists, English and French will be spoken in this country, and that the cuts regarding multiculturalism will not change that. I would like an answer from the hon. member.

[Randy White, Reform, Fraser Valley West, BC]

Mr. Speaker, the cutting back of multiculturalism I was talking about is about $21.5 million relating to grants to cultural groups. That is not the only cut that has to come about. I listed only a few.

I am surprised government members would really believe Canadians would re-elect them in view of where they have already started to go. Their deficit is higher than anyone expected. We can look at what happened last week in the House.

We asked a question of the Prime Minister about why they gave away a patronage payment of $4.5 million to his riding to build a museum. They spent $172,000 on one minister to take one flight to make a speech. They gave $27 million to Quebec City for a conference centre. They blew away $120 million by misfinancing CBC. They took over a deficit of $33 billion. They said it was going to be $45 billion and now they say we should be happy at $40 billion.

There is a saying that goes: If you forget the past, you are condemned to repeat it. The past is the Conservative government. The government is condemned to repeat it if it keeps on the same road.

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, I listened with interest to my friend's commentary. What caught my attention was his reference to the fact that he thought the Liberal government looked very much like past Conservative governments.

What gave my hon. friend the clue? Was it the fact that the Conservatives promoted NAFTA? Of course the Liberals opposed NAFTA and then after they became the government they signed it. The Conservatives supported cruise missile testing and the Liberals opposed it, but when they got into government they too approved cruise missile testing. In opposition, my hon. friend opposite often spoke against payroll taxes, and one of the first things the government did was, of course, increase payroll taxes.

[An hon. member]

They rolled it back.

[Nelson Riis, NDP, Kamloops, BC]

Well, indeed, introduced it and a few days later rolled it back.

But are these items some of the reasons that my hon. friend thought that the present government looks an awful lot like the Conservative government?

[Randy White, Reform, Fraser Valley West, BC]

Mr. Speaker, I like the way the hon. member got his speech in by asking the questions. He made some very good points. Yes, we learn fast, we new members. I suppose I could use those too.

I guess what reminds me most of the Conservative government over here is the acceptance of deficit financing and the very acceptance by virtue of their budget that the debt will increase by $100 billion in three years. It was not a problem with the Conservatives and it is not a problem with the Liberals.

[Audrey McLaughlin, NDP, Yukon, YT]

Madam Speaker, on February 1, the Minister of Finance stated in this House, and I quote:

There is a profound sense that the status quo simply will not do and that if we continue on our current path then that would be a road to nowhere.

Having read the latest budget, I realize that, unfortunately, it will lead us nowhere. Why? Because it does not deviate in any significant way from the course taken by the Conservatives over the last nine years.

The Liberals were elected because they promised jobs. Yet, there are 29,000 fewer jobs in Canada today than there were when the present government took office. Voters clearly showed the previous government how they felt about the unacceptable unemployment level. With this budget, the present government did not keep its word.

Page 9 of the budget makes the point clearly: "The unemployment rate will continue to exceed 10 per cent in the foreseeable future". There is no hope for unemployed Canadians. One in five workers in Canada is unemployed or has a part-time job because full-time jobs are impossible to find.

The budget simply abandons these people to pave the way for a jobless recovery.

Canadians have had enough of what the former government used to call the jobless recovery. I ask the government why are there no targets in the budget for reducing unemployment? There are deficit reduction targets, as there should be, but also accompanying those should be targets on reducing unemployment.

What is the government's expectation other than, as we see by the budget, that we will have double digit unemployment in the next few years? Instead of choosing to attack unemployment the government in this budget chose to attack, once again, as its predecessor did, the unemployed.

The Minister of Finance told us early on through the whole pre-budget consultations that everyone would share equally in the pain of this budget. I ask people to consider the facts and whether Canadians have shared equally in the pain of this budget.

Fact one, fully 50 per cent of the spending reductions in the budget are on the backs of the unemployed.

Fact two, the poor who rely on the social safety net lose $2 billion. The social policy review has been given its final mandate before it even begins.

Fact three, the provinces face cuts in transfers, increased welfare costs when unemployment runs out and there are no jobs to be found. The budget is a very elaborate offloading to the provinces and territories and to unemployed Canadians.

Fact four, the Atlantic provinces get more than their fair share of the pain. With unemployment levels as high as 20 per cent in the Atlantic provinces, facing base closures, reductions in income, reduced fisheries compensation and no jobs, no one can look at the budget and say that the pain has been shared equally.

These last few months since the election of the government we have witnessed a range of consultation initiatives. Let us look at what the budget really says about what those initiatives will mean. Prebudget consultations were held when it is clear that the budget is just going to be a continuation of previous governments. When the Minister of Finance looked in the mirror he saw his predecessor, Don Mazankowski.

Defence reviews are being held when the government has already moved on the issue of defence. Social policy reviews are promised to be held when the budget in fact sets the parameters for that very debate. Negotiations on transfers to the provinces are also to be negotiated or reviewed, we are told. However, the finance department has already determined what the outcome will be with this budget. Lip service is being given to collective bargaining in this budget, but the budget precludes it.

On February 2, 1994 there were 29,000 fewer jobs in Canada than on October 25, 1993. The government was elected with the hope that it would make good on its promises to create jobs and to get Canadians back to work. What does this budget show? It shows 25,000 fewer jobs in the public service, 16,500 jobs from defence. We did not know that the government's job plan was going to work in reverse after it got elected. This budget shows that is exactly what is going to happen.

The minister said we would all share the pain equally. I ask Canadians if they feel it is fair that $6 billion was cut from the unemployed while the rich still get to deduct 50 per cent from the cost of their cruises and hunting trips. The unemployed will be getting more trips too, but those trips will just be to the food banks.

The wealthy certainly did not need to fear the budget. They will still get to hide their money in private trusts, untouched. The 63,000 profitable corporations will still go untaxed, untouched. Offshore profits are untouched by the government.

That is why, on behalf of Canadian workers and also on behalf of about six million Canadians who want to work, I ask the Minister of Finance to send back his work boots. The last thing we need is to be kicked while we are down.

The budget clearly shows that the Minister of Finance should send back his work boots. We do not need to be kicked while we are down.

Elements of the budget have not given hope to Canadians as it should have done. It has not restored consumer confidence that needed to get our economy on the rise.

The government has failed on all counts but most seriously it has failed the faith of Canadians, the faith that Canadians elected it to provide jobs to get them back to work. In fact more people are out of work.

Later in this session I will be presenting a private member's bill on full employment. It will ask the government and require the government to set employment targets, to put before the House on a regular basis through the Minister of Labour a report on how those targets have been achieved and to give a full report to every member about the objectives of the government in terms of job creation. The time is long past when empty rhetoric and promises will do. Canadians want to see a pay cheque, not a promise.

[Dennis Mills, Liberal, Parliamentary Secretary to Minister of Industry]

Madam Speaker, I want to say to the member for Yukon that whenever a budget is put forward there will always be people, through change and transition, who will go through some pain.

I want to say to the member that we feel the pain that a lot of those people-we do not feel all of the pain, but we feel a little bit of the pain-are going through, especially on those bases in Atlantic Canada.

The member knows we inherited a fiscal framework that was dramatically different from all of the forecasts to which we had access. We have been caught in a very tough bind. It is our collective responsibility to try to get some kind of confidence going in this country.

There is an area in the budget that the member refused to talk about or forgot to talk about and that is the area around small business. The member for Yukon has made tremendous speeches on the importance of small business. Small business represents our greatest hope for putting Canadians back to work. It represents our greatest hope for liquidating the unemployment problem. I think she has to be fair and recognize that there are many good things related to small business in the budget.

I have heard from small business people and already just the mere fact that the Minister of Finance announced we would be having a comprehensive study on access to capital for small business has caused a positive response in the community. Banks right now are beginning to trip over themselves in providing a more aggressive lending practice toward small business. That is a good feature of the budget and I do not think we should forget it.

The other thing related to small business in the budget is the continuation of that good idea about new home ownership from the RRSP pool for first time buyers. In my community there are many people in the trades; carpenters, plumbers, home builders who are happy about that and already we can see some activity in the home building industry. That is another good part of the budget.

My only point to the member for Yukon is that, yes, this is a tough budget and I acknowledge that. We have ourselves in a fiscal bind, the likes of which we have never seen in this country. When we talk about the budget she should at least acknowledge that there are some portions of it that really are exceptional. The section relating to small business is headed in the right direction.

[Audrey McLaughlin, NDP, Yukon, YT]

Madam Speaker, I will agree with my hon. friend. I certainly concur with an emphasis on small business but I would remind my hon. friend that small businesses rely on customers. If farmers are going bankrupt and factories and mines are closing across this country, there are not going to be many customers.

We have to make the link between the two. People living on reduced unemployment insurance with no hope of a job and people living on reduced social assistance are certainly not going to be viable customers for the small businesses that my friend mentions.

I agree that the Canada investment fund, a fund that we proposed during the election, is important to get venture capital to small businesses. I support that. I hope members opposite will review the proposal of the New Democratic Party. It was reasonable. There are some similarities to that of the Liberal Party. We share some good ideas on that. The hon. member across and I both share the necessity of ensuring that part of our economy is stimulated.

I would like to mention two other points on small business. I note that the budget says that Canadian business centres will be established in every province. I hope that was just a lapse. We from the territories have to pick up on this lapse and hope that there will be one in Yukon and the Northwest Territories as well. I am assuming that there was a temporary amnesia there. We do have two territories that cover one-third of Canada's land mass.

The second point I would like to make is with regard to the negotiations, and I applaud the government for doing this, with banks and financial institutions in terms of venture capital to small business. While it is not my place in this period to ask a question, I will phrase it as a comment. I hope that in this consultation the government will raise with financial institutions the possibility of looking at a formula whereby the savings

that come into a particular financial institution from a community or a portion thereof will be reinvested in that community.

One of the main problems we have is that a very large proportion of Canadians' savings is not being invested in Canada. It is being invested offshore. We must encourage Canadians to invest in their own country, something that the province of Quebec and Quebecers learned a long time ago and we could take a lesson from.

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, I am pleased to have an opportunity to participate in today's debate.

I listened to eight or nine Conservative budgets. After each budget I could almost hear the champagne corks popping on St. James Street in Montreal, on Bay Street in Toronto and on Howe Street in Vancouver because almost inevitably that same group was always pleased with the Conservative budget.

Of course working people just shuddered because they knew that they would be slapped with additional taxes, they would be hacked here and there and slashed up. Indeed, they were never disappointed because that is exactly what happened time after time after time.

When the election came along in October, the people of Canada said that they were going to send a clear message to Ottawa and they jettisoned all of the Tories, except two. They said that they were going to send the strongest message possible and set these Tories back so far they were never going to come back, at least in the foreseeable future. They disappeared almost like the dinosaurs.

The people of Canada said that they wanted a government with a strong mandate, one that was going to do something totally different. There was going to be a new direction. There was going to be a new approach. We would get off this monetary and fiscal policy that we saw in the past and the government was going to create jobs. It went on and on.

In the red book there were jobs here, jobs there, jobs, jobs. Of course, this was what Canadians wanted to hear. Therefore they elected the Liberals. Almost the next day things started to change. There is a magic conversion that takes place when Liberals walk across that central aisle and occupy the seats on the right hand side of you, Madam Speaker.

I can see all my friends across there. I remember their passionate speeches against NAFTA, how NAFTA was going to be the killer of jobs. I heard "killer of jobs" echo throughout this Chamber days on end. The first thing they did was sign NAFTA. This sort of jarred people. They wondered what was going on.

Of course, they remembered the payroll taxes that those mean and nasty Conservatives used to impose on small business. The first thing the government did was to impose another payroll tax. The people of Canada started to get a little shell-shocked at this.

Then they remembered that cruise missile testing by the United States was coming up for renewal. They remembered all of the Liberals saying for years that this was dastardly, that it was caving in to the Americans, and they would never do that. When the time came, they did that too. They agreed to it.

I could go on and on, but I think I have made my point. Before we even got started, people were dazed because suddenly the Liberals started to break their promises and do exactly what they said they would not do. They enacted exactly what they said they would never enact.

Along comes the budget. I guess Canadians thought: Well, here is a chance because Liberals were elected to do a job, and that job was to create jobs. What Canadians got was a snow job.

Look at this budget. I am sure that if you went back a few days you would find there were some ghostwriters such as Michael Wilson and perhaps Don Mazankowski. Perhaps they wrote that budget. Maybe Kim Campbell slipped back from Harvard and added her two bits worth.

Has there been a significant departure in terms of domestic policy in this country? No. Has there been a change in monetary policy? No. I know there is a new Governor of the Bank of Canada, sort of a John Crow look-alike. He says that the same monetary policy will continue.

Is there a shift in policy? No. Canadians were hoping for a different kind of budget that would actually put people back to work. What did they find? If they read the budget carefully and they go to page 9, they may ask what the government predicts all of this is going to do. They read through and, lo and behold, they find that unemployment levels will continue in double digits for the foreseeable future.

After all the red book rhetoric, the budget plan says that unemployment will continue at essentially the same level for this year, next year and on into the future.

[Audrey McLaughlin, NDP, Yukon, YT]

And it is a blue book.

[Nelson Riis, NDP, Kamloops, BC]

Yes, this is a blue book. They did not even change the bloody colour, for Pete's sake.

We had a chance to start setting targets. When it came to reducing the deficit, targets were set. This is what we anticipate the debt reduction to be. However, when it came to setting targets for reducing unemployment, they were woefully absent from the budget. This is a serious oversight and it is really too bad.

We have the old approach to the Peter Pan school of economics. We thought it would be something a little bit different from the Liberals; that if you really believe that unemployment will come down, it will. But you have to take action. You have to set

targets and then introduce strategies to reduce those levels of unemployment. That is not in this budget. It is not in here.

Here is what happened to me personally. I received calls from a number of small businesses in Kamloops. They called and said: "We have not read the budget, Nelson, but what is in it for us?" I told them there were a couple of things, that there would be a network established and so on so they could bid on international contracts. I was told: "I am running a hair salon" or "I am running a welding shop, I am not going to be exporting my services overseas. What is in it for us?" I had to say, with a heavy heart, that there was nothing in it for the average business person in this country.

The unemployed, as my hon. leader indicated, were again hit with this budget. The victims of these government policies have been now hit. It is a strange way to run a government. We accept it, but it is a continuation of what we saw for the last nine years under the Mulroney regime.

I want to give credit to the government on one point. Actually I could give it credit on a number but let us just pick one. When it was changing the unemployment insurance system, it acknowledged that some people would be really hard hit. I am thinking particularly of single parents or low income families with dependent children or adults that they are caring for. Their benefits went up slightly. In other words, there was acknowledgement that some people were hard hit.

Is there anything in here for the 1.5 million kids who are living in poverty today?

[Audrey McLaughlin, NDP, Yukon, YT]

No. Not a thing.

[Nelson Riis, NDP, Kamloops, BC]

Not a single word, not a word.

What about the public servants? The public service was hit in this budget. As a matter of fact 25,000 will likely lose their jobs over the next three years as a result of this budget. The government said it was going to freeze their salaries once again.

Does it make sense to freeze everybody when messengers or people who shovel snow off sidewalks have annual incomes in many cases below $20,000 and deputy ministers have incomes in excess of $120,000? It does not acknowledge the fact that some federal government workers are struggling to simply survive.

The government showed sensitivity when it came to changing UI programs. Why did it not show that same sensitivity to the people who actually work for the government? As somebody said the other day, it is like bombing your own troops.

Show some compassion, show some sensitivity. There are people who work for the federal government right now who quite frankly are just managing to survive by the skin of their teeth. They are suffering. There should have been an acknowledgement about that in terms of that blanket across the board freezing of salaries.

My greatest disappointment is that a handful of people are probably still drinking champagne. Those are the richest families in Canada who had a special tax loophole provided for them by a previous government, actually by the Liberals which was then updated by the Conservatives. There is not a single tax lawyer or single tax accountant in this country who says family trusts make any sense at all, not a single one.

I remember when the experts were before the finance committee. The financial advisers were asked what they thought of this particular tax exemption. They all thought it was crazy. They thought it was nutty. They thought the government was goofy to do this.

The Minister of Finance had a chance to show that even the very wealthy in this country are going to have to pay their fair share this time under this new government. Did he close that loophole? Oh, no. The government is going to study it. What on earth is there to study about a loophole that everybody agrees is absolutely dastardly?

In closing, it was a missed opportunity. I could go on and hopefully I will have an opportunity later. I must say that those Canadians who were hoping for a change of course from the last nine years of Brian Mulroney are very disappointed after this budget.

[Jim Jordan, Liberal, Leeds—Grenville, ON]

Madam Speaker, I think anyone who campaigned in the last election found out that very high on the priority list of Canadians was the need to address the national debt and the national accumulating deficits. I notice my good friend from Kamloops did not allude to that.

Today I think we know where the Reform would stand. They would say: "Correct that by deeper cuts". I think I know where the BQ stands, if I understood their leader this morning. We did not get a chance to dialogue with him because of the new rule. I think he was saying: "We would be in favour of deeper cuts, that way of getting at the national debt".

I wonder if the hon. member for Kamloops would tell me where the NDP stands in relation to national debt. Were the cuts deep enough, too deep or just right?

[Nelson Riis, NDP, Kamloops, BC]

I think it is fair to say that there were some changes that could have had a very serious impact in terms of deficit reduction. I named one, the closing off of some of the glaring tax loopholes like the family trust loophole, a consideration of a wealth tax. Again, we are one of the very few countries in the world that does not have a wealth tax. These are not going to solve the deficit problem but they would show good faith in moving in the right direction.

I think if a person wins $5 million on a lottery they would not mind paying some tax on that. I do not think anybody would say that is an unfair request.

The question of a minimum corporate tax that we have often discussed in this House is something that deserves examining. In other words a whole number of changes to the tax system would generate an awful lot of wealth.

This budget assumes that the deficit will be brought down, which we all support. No one in this House would say we do not have a serious debt crisis and a deficit problem and we have to take steps to get it down.

This budget assumes that because of the steps taken there will be economic activity occurring and then general revenues will flow to the central government. That is a fair summary I think.

However, as my leader indicated, when one person is unemployed or underemployed or afraid of being unemployed, if one is living on social services, one does not have enough disposable income to make much difference. That is what we require. We must get people back to work. I know my friends opposite when in opposition said the same thing. It is critical. If we are to pay down the deficit we must get people back to work so that they can contribute and not be a drain on those revenues.

I do not think the budget will put people back to work. I do not rely only on my own observations. I have listened to the experts who responded to the budget. I have yet to find anybody who says it is going to put a lot of Canadians back to work.

We have all sorts of unused capacity. I remember the figures given earlier this week for manufacturing losses in the province of Ontario alone because of unused capacity and the new technologies. They are simply not putting people to work.

This is why the budget has been such a disappointment. There is nothing in it to give hope to those people who are unemployed or to those people who want to see a meaningful new direction in terms of putting people back to work.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, I followed the debate with great interest all morning. If I were confused this morning, I am even more confused now.

Earlier we heard two presentations from the Reform Party. One was saying how we did nothing and there were not enough cuts. The critic for the defence ministry indicated that we cut too much. Now I am hearing something else again. I do not know what it is.

Did we cut enough? Did we not cut enough? We want to entice businesses to hire. The $300 million rollback on the UI will entice companies to hire.

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, we in the House would all agree that the area the government has supported in the past to a certain degree and needs to support more in the future is the area of high technology.

What do we find in the budget? We find the abandonment of the KAON project in British Columbia. I see some of my British Columbian colleagues across the way. That project would have put Canada on the cutting edge of high technology. It would have been a vote of confidence for our scientists and our top engineers in the country and around the world.

The Conservatives slapped British Columbia in the face by abandoning the Polar 8 icebreaker. This was to be the federal government's show of support for B.C. KAON was the same and the government let down KAON. Literally hundreds of millions of dollars that would have gone into creating jobs in the construction area and, most important, in the high tech sophisticated scientific engineering area have now been abandoned. It is very disappointing that we missed this opportunity.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Madam Speaker, the finance minister's budget speech, that could be described as "Campbell meat with Martin sauce", reflects the vicious circle of irresponsibility the federal government has got stuck in.

The Minister of Finance did not allow himself to do the job he has been elected to do. During the whole election campaign, he said "jobs, jobs, jobs", but when the time comes to create them, he is not there. Instead, he forecast a record deficit of $39.7 billion, and a new series of committees. There is a disease in Ottawa, the "committee disease", which I have rarely seen so rampant anywhere else.

The election slogan has fallen by the wayside due to the timidity of a finance minister who has given in to the federal bureaucracy. How then can politicians ask voters for their confidence when, every time, government parties promise one thing during the election campaign and do the opposite?

This budget will contribute to increasing the differences and disparities between the various regions of Canada because, under the guise of the infrastructure program, the federal government is cutting the budgets of the development agencies without giving the provinces any leeway to take over their own development.

The federal government is courageously taking on the weakest in the system by raising the minimum number of weeks of work required to be entitled to UI benefits and bringing down to 55 per cent benefits paid to unemployed workers. That is a Valcourt plus formula. What is worse, they assume that people do not want to work.

The lack of jobs and the extensive restructuring of the North American economy are blamed on the unemployed and on other people who try and improve their lot. Instead of trying to help them, we will take a whole year to cook up a reform, the contents of which are not known, when we should be up and running and taking immediate action. We were not elected to create committees but to take action.

I would like to underline more particularly that the situation in regions like Eastern Quebec is certainly as bad as in aboriginal communities, but I do not find the same level of support for those areas as for aboriginal communities. I think the needs of native people are real, but ours are too, and it is extremely unfortunate that the situation is handled the way it is.

Somebody said a while ago that there is no tax increase. Do you not think there will be a hefty increase for those people who will have to go from unemployment to welfare next year because they do not have those two extra weeks of employment? They will have to find news ways of making ends meet only to find that they are accused of cheating the unemployment insurance system or the welfare system.

The federal government turns a blind eye to the elimination of duplication, because it would have to admit that the federal system itself is the cause of runaway deficits. During the election campaign, voters kept asking the same question: Are you going to create jobs like the Liberals promise they will? Our answer was: Yes, but in order to do that, we need some leeway.

Because of a lack of political courage, the Liberals will not reach their goal since they cannot get this breathing space. In no way, since the recall of Parliament, has the government allowed us to seriously examine spending in order to remedy the inequities, the programs which were created a long time ago, but no longer meet our needs. In the national capital, we often forget what the situation of unemployed people really is. We do not want to look at that because if we did, the government would be forced to admit that federalism is costly for Canada as a whole.

If the Liberals had freed the $3 million lost because of duplication, they would have given hope again to the 25-35 generation whose potential is wasted. That generation includes technicians, engineers, skilled people who should be working. We will realize in 10 or 15 years that this generation has been sacrificed, that we did not give these people the opportunity to work for the good of Quebec and Canada. They will struggle along from one project to another.

The government also forgets-since it has decided to tax the elderly, we understand a little better its agenda, which is to become another conservative government-that unskilled workers older than 40 were the ones who were hardest hit by the recession. Nowhere do we find this search for fiscal fairness which was supposed to be the mark of this budget.

Forgotten were family trusts. Forgotten were the $250 million which are wasted because of duplication of labour services for Quebec alone. I personally had the opportunity to work in reclassification and labour assistance committees which systematically have both a provincial representative and a federal representative to do a job that could be done properly by one person only. Quebec has agreed for a long time to take full jurisdiction in that field but no one wants to hear a word about it.

The government reduces transfers to the provinces by $2 billion, which means $700 million less for Quebec. All the provinces will then have to accept the machiavellian plan of the Minister of Human Resources Development to reform social programs.

This is a very difficult situation to live with since the minister will then take advantage of the hardship the provinces will be faced with, because of the budgetary restraints, to impose on Canadians a reform that they do not want. In the foreword, the Minister of Finance said:

Our goal is a Canada where every Canadian able to work can find a meaningful job.

Unfortunately, there are no incentives in that budget for massive job creation, as promissed by the Liberals during the electoral campaign, for all unskilled workers, except for the infrastructure program and that will judged when it is operational.

By not having contingency funds coming from useless expenditures, the government is acting exactly like its predecessor, the Conservative government, but in their case, such an approach would have been understandable.

The government did not dare cancel the tax shelters of the rich. Rather it turned on average consumers-the elderly and the self-employed-by increasing their tax burden.

They went so far as to create two income classes for UI beneficiaries. Single people will have to prove they are not hiding a lover in their closet. What a good decision is this, the Year of the Family. Terrific! All the better since individuals living alone very often have fixed expenses which eat away at their budget. The only jobs created by this decision will be those of Axworthy's Macoute-style inspectors they will surely appoint, because of their bureaucratic logic. Federal Liberals should have taken advantage of the experience of their Quebec counterparts. A similar measure is now leading to the downfall of the Johnson administration.

In its process, the federal government even took the incredible decision of increasing the National Research Council's budget, an organization that is far from being as productive as regional research centres. Every part of the budget bears the

mark of Ottawa mandarins totally unaware of what citizens are experiencing in the regions, everywhere in Canada and in Quebec. The government members did not do their homework.

On another point, I want to remind the minister of defence that, during the campaign, we did advocate cuts in the defence budget. However, the decision to close the only French language military college in all of North America has been inspired by something else than pure financial arithmetics. I appeal to all the Liberal members from Quebec, who will be stigmatised by this decision, especially the Prime Minister.

The Prime Minister and I come from the same region. The St. Maurice Valley is an area which had long been dependent on American or English-Canadian companies in the pulp and paper industry. Then, we had to slowly blossom as full partners. If he is not aware of the impact a decision such as the closure of the Collège de Saint-Jean will have, I think that he forgot what being a Quebecer means.

If the federal system can no longer assume the training of French-speaking officers in Quebec, Quebec will not take this laying down. We will fight as vigorously as others have done to protect the survival of the French fact in other Canadian provinces. The Acadian and francophone communities know full well that a bilingual education system is the shortest route to anglicization, for soldiers as well as ordinary citizens.

The Liberals have decided to make committees the corner-stone of their job creation program. Let me name a few: a task force to develop a code of conduct regarding loans to small and medium-sized businesses; a task force on the taxation of family trusts; a task force on an improved supplementary plan to make businesses more competitive; a review of how to increase the efficiency of federal assistance. Moreover, a discussion paper on science and technology will be published to trigger a national debate that will lead to a new policy in that area.

As a former civil servant, I know only too well this disease called "committee-itis". I know the recipe. It is the best way to go nowhere. A year or a year and a half from now, we will receive reports on reports. They will be quietly tabled here, on a day when the attendance is low, and they will not resurface until the following year.

Today, governments must react quickly to allow this country to enter the excessively competitive world market. While we prepare all these fine reports and that years of pussy-footing in committee go by, Canada will pursue its breathtaking drop on the list of nations with declining productivity. We were not elected here to set up committees.

Action was urgently needed to help college and university graduates. Now, forestry workers will have to hunt down 12-week contracts instead of 10-week ones. Of course, unemployment insurance officers will be overworked, chasing down the bad guys who are trying to save their skins.

The government is not taking its responsibilities and is behaving like a consultant when it should be governing. By giving itself additional time, it avoids making real decisions. However, unlike the Conservatives, the Liberals have dared to increase the qualifying period for unemployment insurance.

This budget appears to be the work of bureaucrats unaware of the devastating effect raising from 10 to 12 the minimum number of weeks of work required to be eligible for unemployment insurance will have in our local areas. I urge the Liberal members to remind their Minister of Finance of their election promise to put Canada back to work.

This budget will disillusion those who still believed in election promises. During the election campaign, I met people working in peat bogs and took half an hour or so to explain to them how politics could be useful and how things could change with the coming election. Now, when I will go back home, these people are going to come to me and say: "See, nothing changed. You elect a new government and, once in office, it does the exact same thing as the ones before". At least, I will be able to say that we did not change.

My cry to the Minister of Finance is also the cry of the regions, those struggling ever since fishing was restricted and doing their best to cope with their unemployment problems. These are also the regions that the young generation has inexorably fled, as well as those striving to pull through. No, the regions are not applauding this budget. They are scowling and looking forward to taking their development into their own hands. Two thirds of welfare spending goes to the various intermediaries in the system instead of to those who need it-that is something which should be attacked right away, and not worked on in a committee for over a year.

Those who are surprised that Quebecers regularly and repeatedly elect sovereigntists should understand why, faced with these successive Tory or Grit budgets that only show the influence of the federal bureaucracy. If only to get out of this infernal cycle, Quebec can no longer afford to stay in the federal system.

Indeed, next year at the same time, the Minister of Finance will explain to us why he could not keep the deficit to $39.7 billion, but that 1995-96 will really be the year when the government regains control of its budget. I would be quite prepared to bet on that with any hon. member. It is a well-known old refrain that rings hollow.

To avoid this sad situation, I again ask the government to strike a special all-party committee to analyze all spending. This would force government managers to answer our questions about the necessity of the work done and would show all of

Quebec and Canada that we, not the senior civil servants, are the ones running this country.

Tomorrow I will go back to my riding to tell the people of Kamouraska-Rivière-du-Loup that there is no more hope of regaining control of the runaway federal government. I would hope that they rise up everywhere to show their disapproval as they have been doing in the media for several days. On the weekend, when you meet your constituents, how will you answer them when they ask all government members how this Liberal budget is different? Is there any hope in this budget of putting Canadians and Quebecers back to work? It is up to the Liberal members to bring their government to its senses.